What a performance

The share price performance of LCK has been nothing short of remarkable. Consider that over the last year the stock has faced a Board challenge, with associated disgruntled shareholders selling out, plus sustained selling from some ex-ARP shareholders who have come out of escrow less than three months ago. In fact, since the 10 May to date, at a time when we have only had good news and positive progress, existing shareholders have sold over 30 million shares. Why would one be selling now? Clearly there are other agendas here. Nevertheless, what a great stock to still be trading above 16 cents. Imagine when disillusioned and disgruntled shareholders have sold out. ARP shareholders held about 100 million LCK shares, and as over 65% are aligned with management, as the latest shareholder register suggests, there were possibly 35 million to sell and we've already done 30 million. I think the selling will be coming to an end sooner rather than later.

On the valuation front, upside. The math is straightforward. In broad terms, what is 2,000PJ of 2p gas worth? The market suggests a valuation of between 50 cents and $1.20/PJ. Note that I only used 2,000 and not 2,900PJ. Lets be conservative about recoveries. A recent broker report suggest that on gas reclassification to 2p, the LCK valuation will move from 2 cents presently to 5 cents. Really? Is that all? I don't think Santos, AGL and Co will value the stock at 32 cents, which is what 5c suggests. Even if its valued at 10% of the market 2p average, that is 12c and the stock price is 77c/share.

I read that investors are concerned about what products the company will produce, and there
appears to be some anxiety regarding this issue and associated company announcements. Any company would be insane to announce to the market now what the intended product mix will be in 3 years time. Why would you do it? So that some investor can jump up and accused the company of not doing what it had announced. Does anyone doubt that the company will try to maximise returns, and so pick the appropriate product mix?

I'm delighted with the stock's performance, against all odds, and look forward to making an embarrassing amount of money from this stock. Incidentally, I'll be happy to accept a takeover bid at $2.00 now. The longer the bidder waits, the higher the price will go. Remember, just 50PJ of production is an NPAT of about $150m at 15x multiple that's $2.3bn market capitalisation and assuming 750m shares (includes capital raising to fund expansion) the stock is at some $3.00 a share!